July Room Rates Hit New High

The DJIA fell 643 points while Nasdaq was down 2.6% or 324 points while the S&P 500 fell 90 points. The 10-year treasury yield was up .05 to 3.04%. When it comes down to it, interest rates drive equity declines or gains. Lodging stocks were lower. AHT was the big mover, down -8%.

Raymond James believes the recovery in global travel still has plenty of room to run. They believe this is the earliest stage of what is set up to be a multi-year fundamental recovery in global travel and that the greatest upside to lodging stocks can be captured early in the recovery. RJ believes the group’s stock performance will, more than anything else, be dictated by shifts in macro expectations. Their top picks in the sector include Pebblebrook Hotel, Host Hotels and Ryman Hospitality.

A 13-F filing from Sunstone Hotels showed Blackstone Group had taken a 4.1% stake in SHO. Blackstone has 8.65 million shares of SHO and is ranked as a Top 5 holder.

According to July 2022 data from STR, the U.S. hotel industry reported record-high monthly room rates on a nominal basis. Data from July 2022 (percentage change from June 2019) includes: Occupancy: 69.6% (-5.45); ADR: $159.08 (+17.5%); and RevPAR: $110.73 (+11.2%). The US also reported an all-time high RevPAR levels, while occupancy was the second highest since August. Among the Top 25 Markets, Oahu Island experienced the highest occupancy level (86.3%). Markets with the lowest occupancy for the month included New Orleans (57.2%) and Phoenix (57.3%). San Francisco reported the steepest decline in occupancy when compared with 2019 (-16.2%).

KMS Development Partners have closed on a subdivided US Postal Service lot in Hoboken, NJ. The company had unveiled a plan to bring a 20-story Hilton to the property way back in 2015, with approvals being granted the following year. KMS officially acquired the property on August 3, which will sport an address of One Sinatra Drive. The Hoboken Hilton will feature 349-rooms, a second-floor restaurant and bar, ground-floor retail storefront, and a top floor bar and event space set to include a 2,889 square foot outdoor terrace. KMS anticipates the construction phase will begin in late spring/early summer 2023. The Hilton will be Hoboken’s second major hotel facility when completed. 

Artemis Hotel Group and Toccoa Capital Management announced the addition of the Hilton Garden Inn Lithonia, GA. GF Hotels & Resorts will manage the asset. The 5-story hotel features 110 rooms, an indoor pool and over 5,000 square feet of meeting space. A full renovation of the hotel is planned.

A boutique hotel is being proposed for the corner of Fifth and Colorado streets in Santa Monica, CA. The Santa Monica Architectural Review Board reviewed the proposal for a hotel to be squeezed into a narrow space between two existing residential buildings. The lot is the former site of the Angels Attic dollhouse museum and is only 41.75 feet wide. The proposed project would be eight stories high with 74 guest rooms, a ground floor restaurant, outdoor seating area, lobby, guest drop-off area, rooftop bar and two subterranean levels with a fitness area and business center. 

The Desolation Hotel celebrated its official grand opening in South Lake Tahoe, CA. The eco-luxury micro-resort offers 21 luxury suites, a restaurant and bar, a second restaurant, a saltwater pool, outdoor Jacuzzi, a cedar sauna, a fitness room and 20 EV charging stations.

JLL’s Hotels & Hospitality Group has closed the sale of and arranged acquisition financing for the former Loews Boston Hotel, a 225-key boutique hotel in Boston, Massachusetts’ Back Bay. JLL marketed the hotel on behalf of the seller in the sale to Electra America Hospitality Group. In addition, JLL worked on behalf of the buyer to secure the loan through Oxford Properties Group. The buyer plans to rebrand the property as Hotel AKA Back Bay, marking AKA’s first hotel in the city. 

Mumford Company represented an affiliate of Raines Co. in the sale of the Courtyard by Marriott in Cayce, SC. Raines Co. will continue to manage the property in a short-term arrangement. The purchaser was an affiliate of ABC Investments and Management Co. The purchasers plan cosmetic renovations for continued operations as a Courtyard by Marriott.

Part of the $350 million rebuild of the iconic Frenchman’s Reef property in St. Thomas will be a new Westin Resort. The new Westin Beach Resort and Spa at Frenchman’s Reef is slated to open in late 2022, according to an update from Aimbridge Hospitality, which is managing the property.

Personnel Moves

Peachtree Group appointed Tim Witt as its president of the company’s newly launched 1031 Exchange Delaware Statutory Trust program. Witt was former Chief Investment Officer of DAI Securities. Peachtree’s 1031 Exchange DST program will invest in high-quality, institutional-grade hotels in the U.S. Peachtree Hospitality Management is expected to operated any properties acquired as part of the 1031 Exchange DST.

Twin Bridges Hospitality named Jillian Katcher as President. Jillian will focus on taking the organization to its next level of growth while maintaining the company’s unique asset management style. Jill comes to Twin Bridges Hospitality from her most recent post as Co-Head of Hospitality Investments at Cascade Asset Management Co.

Europe Highlights

Britannia Hotels purchased the 278-bedroom Premier Inn Glasgow City Centre (Charing Cross) hotel off a guide price of £8.5 million. This latest acquisition will be Britannia Hotels’ 64^th hotel taking their total room count to almost 12,300 guest bedrooms. The deal came about because owner Whitbread decided to reconfigure its network of hotels in Glasgow City Centre. Christie & Co conducted the sale process.

The Canada Pension Plan Investment Board and Hamilton-Pyramid Europe have established a new joint venture focused on the European Hospitality sector with CPP Investments committing €475 million. With initial equity commitments of €500 million, the JV will focus on acquiring operating hotels in key gateway cities and select resort destinations in Europe. Hamilton-Pyramid Europe was formed through the merger of Hamilton Hotel Partners and Pyramid Hotel Group.

The following charts are based on the latest Hotel Construction Pipeline Trend Report from Lodging Econometrics.

Europe 2022 Actual and Forecast

Period	Hotels	Rooms
H1 2022	188	28,350
H2 2022	259	36,548
Full 2022	447	64,898
Full 2023	421	62,281
Full 2024	419	64,016

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Europe Lodging Construction Pipeline in Q2 2022

Status	Projects	Rooms
Under Construction	817	131,772
Start in 12 months	413	60,397
Early Planning	476	73,649
Total	1,706	265,818

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Europe Lodging Pipeline by Country

Country	Projects	Rooms
United Kingdom	309	46,296
Germany	258	44,692
France	152	17,338
Portugal	123	14,811
Poland	85	12,205

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Europe Lodging Pipeline by City

City	Projects	Rooms
London	80	13,683
Dusseldorf	46	8,492
Paris	35	5,540
Lisbon	34	3,850
Istanbul	32	6,598

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Europe Lodging Pipeline by Franchise

Franchise	Projects	Rooms
Accor	262	35,694
Marriott	201	31,560
Hilton	192	28,550
IHG	151	20,644
Radisson	45	8,266

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Europe Lodging Pipeline by Brand